THE HOMESTEAD DEFENSE FAILS! 4th DCA’s Ruling on the Applicability of Florida’s Homestead Exemption on Assignments

Property Damage

Homestead Exemption

Now, stop me if you’ve heard this one:

An insured has suffered a loss. They hire you, a remediation company, to perform services to their property to restore the property to pre-loss conditions. In exchange, they execute an Assignment of Benefits (AOB) contract with your company where you can recover the cost for your services directly from the Insurance Provider. Your company, as an Assignee, requests the Insurance Provider to issue payment for said services. The Insurer refuses to pay the claim based on…the Homestead Exemption?!?!

Now, for those of you unfamiliar with the Homestead Exemption, I’ll give you the gist of what purpose it serves.[1] The Florida Homestead Exemption is a law that protects a property owner’s home from being forced into sale to satisfy some lien, obligation, or monetary judgment.[2] There are some exceptions to this Exemption but, for the sake of this analysis, we need not further explore what those are.

So, why is this exemption relevant to an Assignee’s attempt to collect payment for services rendered to an Insured’s property? And why is it the Insurer that is arguing against issuing payment to an Assignee by relying on a State Law Exemption instead of a provision of the insurance policy itself? Well, quite recently, the 4th District Court of Appeals (DCA) issued an opinion in All Ins. Resto. Svcs., Inc. v. American Integrity Ins. Co. of Fla., where arguments were considered on an insurer’s motion to dismiss being granted by the lower court due to an interpretation of a 3rd DCA’s decision on a similar matter.

Here, the assignee (All Ins. Resto. Svcs.) appealed a lower court’s dismissal of its action against an insurer (American Integrity) on the grounds that the insurance benefits being sought by All Ins. Resto. Svcs. were “imbued with the same [homestead protections] as the property itself.”[3] In making such a determination, the lower court sought All Ins. Resto. Svcs.’s compliance with Florida Homestead laws governing the “sale, alienation or devise” of such property, which it did not find, and thus dismissed.

On Appeal, the 4th DCA, after engaging in a well-reasoned analysis of the grounds upon which the dismissal was granted, concluded that the homestead exemption was not implicated when dealing with the assignment of post-loss insurance benefits. American Integrity relied on the court’s opinion in Quiroga v. Citizens Prop. Ins. Corp., which summarily found that not only were insurance proceeds imbued with the same homestead protections as the property itself, but also that assignment of such proceeds could not be enforceable through an unsecured agreement. Notably however, as this Court pointed out, is that in Quiroga the matter involved an attorney and client and the attorney’s attempt to impose a charging lien on the client’s insurance proceeds. No assignment had ever been implicated per se. However, in that context that court found that an attorney could not attach a lien on its client’s property for insurance proceeds it had secured on their behalf.

Contrary to American Integrity’s reliance on Quiroga, the 4th DCA instead held that the opinions issued in Citrus Contracting and Speed Dry addressed more directly the use of the homestead exemption in the context of assignments of post-loss benefits. In Citrus Contracting, that court held that neither the Florida Supreme Court nor any Florida appellate court had explicitly extended such a protection under the homestead exemption, and thus denied the insurer’s argument.[4] In Speed Dry, the 5th DCA held an assignment of post-loss benefits did not transfer title of real property to a third party, but instead contractual rights from which the third party could stand “in the shoes of the homeowner.” Therefore, given that no real property interest in the homestead was being transferred, the assignment of post-loss benefits was not prohibited by the Homestead exemption.[5] The purpose of the homestead provision is to “protect the family and the family home.” Limiting voluntary assignments of post-loss insurance benefits did not interfere or bolster this purpose, nor did public policy support such an argument since the homeowner would no longer be subject to the demand of creditors. Accordingly, the 4th DCA reversed the dismissal and inadvertently joined the 5th DCA in its holding.

Overall, while the court ultimately reached a decision that aligns with the intent of the Legislature, a valid argument was made which needed to be addressed. Creativity, coupled with knowledge and experience, can go a long way when it comes to determining who an insured or third party should hire to represent their interests. When it comes down to it, make sure you choose right law firm (contact us here) and feel free to explore what insight and approach your attorney may have. We might surprise you!

If you have a question regarding this article, or your claim in general, follow the link here, email us at, call us at 754-260-5410, or stop by our Fort Lauderdale office for a free consultation. Your Loss is Our Concern.

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[2] Florida’s Constitution, Article X, Section 4.

[3] All Ins. Resto. Svcs. v. American Integrity Ins. Co. of Fla., 4D21-89 [Fla. 4th DCA 2022], quoting the lower court’s dismissal order.

[4] Citrus Contracting LLC v. Liberty Mut. Fire Ins. Co., No. 6:19-cv2192-Orl-28EJK, 2020 WL 364581, at *2 (M.D. Fla. Jan. 22, 2020)

[5] Speed Dry, Inc. v. Anchor Prop. & Cas. Ins. Co., 302 So. 3d 463, 466–67 (Fla. 5th DCA 2020)